Radio Frequency Identification, or RFID is a technology that stores an broadcasts data using an electronic tag. The tag consists of an RFID chip attached to an antenna which is capable of transmitting in the kilohertz, megahertz, and gigahertz ranges. These tags are used to identify items much like bar codes. Unlike bar codes, the RFID reader does not need to be in close proximity to identify the item tagged. RFID tags can be embedded in packages and do not require a line of sight to operate.

Symbol technology is a manufacturer of RFID tags and readers. A host of business problems including financial, accounting, and management issues led to the sale of Symbol to Motorola for $3.9 billion. This comes to about $15 per share paid by Motorola for Symbol, an 18 percent increase over Symbol’s closing price of $12.71 on September 15th. With the purchase of the RFID producer, motorola also gains access to their customer base. With this customer base Motorola gains access to a formidable roster including companies like Coca-Cola, FedEx, and the US Postal Service.

Motorola will use the technology acquisition to expand its wireless position outside the cell phone market. The new technology will be aimed specifically at customers on their corporate and government rosters.

The companies expect the deal to close by early next year. When the deal closes Motorola will be positioned to become the largest provider of hand-held scanners and devices that connect to networks via wireless interface.